MPI Report: Immigrants Appear to Earn Wage Premium from Citizenship

WASHINGTON—Beyond imparting political and social rights, naturalization appears to confer economic gains for immigrants in the United States, with a wage premium of at least 5 percent, according to a new Migration Policy Institute study (MPI) released today.

Even after accounting for the fact that naturalized immigrants have higher levels of education, better language skills and more work experience in the United States than noncitizens, the MPI study concludes there is some evidence of a wage premium of at least 5 percent resulting from citizenship.

“This wage premium may be even larger for Latino immigrants and for women,” said MPI Senior Policy Analyst Madeleine Sumption, the study’s lead author. “While it is difficult to separate the impact of citizenship from the favorable characteristics of immigrants who are motivated to naturalize, the best evidence available suggests that a citizenship premium does exist.”

The report, funded through a grant from the John S. and James L. Knight Foundation, finds that naturalized citizens appear to have weathered the effects of the recession more successfully than noncitizens, experiencing a decline in median annual earnings of 5 percent from 2006 to 2010, compared to 19 percent for noncitizens and 8 percent for the US born.

Despite the benefits of U.S. citizenship, which range from the right to vote in national elections and run for public office, access to certain public-sector jobs and the ability to petition to bring family members more quickly to the United States, naturalization rates are lower than most other countries in the Organization for Economic Cooperation and Development (OECD). Slightly more than 40 percent of the 40 million immigrants in the United States held U.S. citizenship in 2010. By comparison, 79 percent of immigrants in Canada and 68 percent in Australia were naturalized.

More than 8 million legal immigrants, representing about two-thirds of all legal permanent residents in the United States, are eligible to apply for naturalization but have not done so, according to the Department of Homeland Security.

“Some of the key barriers to naturalization include limited English proficiency and the $680 cost to apply, which is higher than in many other leading immigrant destinations,” said Michael Fix, MPI’s senior vice president and director of studies.

The study also notes that refugees and immigrants from politically troubled countries naturalize at higher-than-average rates. By contrast, immigrants from high-income countries are less likely to naturalize despite higher levels of education and language proficiency, perhaps because they perceive U.S. citizenship as providing fewer benefits relative to their existing nationality.

The Migration Policy Institute is an independent, non-partisan, non-profit think tank in Washington, D.C. dedicated to analysis of the movement of people worldwide. MPI provides analysis, development and evaluation of migration and refugee policies at the local, national and international levels. For more on MPI, please visit www.migrationpolicy.org.